Is the American Empire at an End? (Part II)

Most Americans, I believe, would prefer to think of China as a friendly nation with a different political and economic perspective of the world.

While the U.S. remains committed to a free-wheeling form of capitalism and a democratic system of government where power (for the most part) is lodged with an informed (one hopes) citizenry, China remains a largely closed society with a political system ruled by an elite Communist politburo that prefers to manage the nation’s economy and control access to information.

True, both nations seem to be benefiting from two-way trade, though the Chinese are expected to have a $300 billion trade surplus with the U.S. in 2011. Meanwhile, U.S. consumers are told they are benefitting because they are buying products made in China for much less than what they would cost if made in the USA.

The problem is, while Americans might like to think of China as a friendly nation, it is becoming increasingly more difficult to do so given China’s recent behavior.

I am talking about what appears to be that nation’s secret cyber war against the United States. Last August, for example, the Internet security firm McAfee revealed a widespread attack against 72 organizations, including the United Nations, U.S. defense contractors and several other corporations in what a McAfee executive called “the biggest transfer of wealth in terms of intellectual property in history.”

This past week some 48 chemical and defense companies were victims of a coordinated cyber attack that has been traced to China, according to the security firm Symantec Corp.

Computers belonging to these companies were infected with malicious software known as “Poison Ivy,” which was used to steal information such as design documents, formulas and details on manufacturing processes, Symantec said this week.

While Symantec did not identify the companies, it said they included several Fortune 100 corporations that develop compounds and advanced materials, along with businesses that help manufacture infrastructure for these industries. Most of the infected computers were located in the US and UK, and included companies that developed advanced materials used in military vehicles.

In February, McAfee warned that hackers working in China broke into the computer systems of five multinational oil and natural gas companies to steal bidding plans and other critical proprietary information.

Computer hackers, possibly from the Chinese military, interfered with two U.S. government satellites four times in 2007 and 2008 through a ground station in Norway, according to the Congressional Economic and Security Review Commission.

U.S. military and intelligence agencies use satellites to communicate, collect intelligence and conduct reconnaissance. While the Commission doesn’t accuse the Chinese government of conducting or sponsoring the four attacks directly, it says the breaches are consistent with Chinese military writings that advocate disabling an enemy’s space systems, and particularly “ground-based infrastructure, such as satellite control facilities.”

U.S. authorities for years have accused the Chinese government of orchestrating cyber attacks against adversaries and hacking into foreign computer networks to steal military and commercial secrets. Assigning definitive blame is difficult, the Commission says, because the perpetrators are adept at obscuring their involvement.

Nevertheless, China this year “conducted and supported a range of malicious cyber activities,” the Commission’s report charged. Evidence emerging this year tied the Chinese military to a cyber attack on a U.S.-based website of the Falun Gong spiritual group, among other attacks.

Should we be surprised? Not really.

There are tens of thousands of Chinese students at America’s best universities, doing doctorates and post-docs in computer science and information technology. When they complete their studies in the U.S. many return to China with their U.S. degrees and improved skills.

Most of the world’s computers are made in China and it has been suggested that ‘malware’ – viruses and malicious ‘worms’ could be hardwired into the millions of computer chips being manufactured in the Far East. If so, the Chinese wouldn’t even need to use the Net to mount an attack; the enemy is sitting there already, right on your desk.

“What’s going on is very large-scale Chinese industrial espionage,” says Richard Clarke, a former top U.S. government official who held roles in counterterrorism and cyber-security and now is chairman of Good Harbor Consulting, a security and risk-management company in Arlington, Va. “They’re stealing our intellectual property. They’re getting our research and development for pennies on the dollar.”

Meanwhile, American officials are reluctant to raise the subject with their counterparts in China. What message does that send to the Chinese? The answer is simple: keep stealing from us.

Clarke and other cyber-experts say it’s time for the U.S. to start fighting back. President Obama, the urge, should “authorize action to go after the computers involved in the attack.” Clarke says the U.S. could zap malware across the Internet, “the same way the Chinese do it. You can destroy the computers involved in the attack. They can pay a price.”

While such a move would risk escalating tension and might invite retaliation from the Chinese, Clarke says it’s better than rolling over while all your R & D and intellectual property is stolen and the U.S. does nothing about it.

There is little doubt that the America is at risk–not from traditional armies and military machines, but from a new form of digital warfare and espionage.

And if Americans still prefer to believe that China is nothing more than a friendly economic competitor, they had better wise up fast. We are facing a new kind of warfare and China is the primary adversary.

It is stealing our secrets, our technology and our intellectual capital at a rate unseen in history. And if we continue to let it happen, there is little doubt that the American Empire will soon be at an end.